题目
(ii) The UK value added tax (VAT) implications for Razor Ltd of selling tools to and purchasing tools from
Cutlass Inc; (2 marks)
第1题
19 years respectively. Alvaro and Maria have lived in the country of Koruba since 1982. On 1 July 2005 the family
moved to the UK to be near Alvaro’s father, Ray, who was very ill. Alvaro and Maria are UK resident, but not ordinarily
resident in the tax years 2005/06 and 2006/07. They are both domiciled in the country of Koruba.
On 1 February 2007 Ray Pelorus died. He was UK domiciled, having lived in the UK for the whole of his life. For the
purposes of inheritance tax, his death estate consisted of UK assets, valued at £870,000 after deduction of all
available reliefs, and a house in the country of Pacifica valued at £94,000. The executors of Ray’s estate have paid
Pacifican inheritance tax of £1,800 and legal fees of £7,700 in respect of the sale of the Pacifican house. Ray left
the whole of his estate to Alvaro.
Ray had made two gifts during his lifetime:
(i) 1 May 2003: He gave Alvaro 95 acres of farm land situated in the UK. The market value of the land was
£245,000, although its agricultural value was only £120,000. Ray had acquired the land on
1 January 1996 and granted an agricultural tenancy on that date. Alvaro continues to own the
land as at today’s date and it is still subject to the agricultural tenancy.
(ii) 1 August 2005: He gave Alvaro 6,000 shares valued at £183,000 in Pinger Ltd, a UK resident trading
company. Gift relief was claimed in respect of this gift. Ray had acquired 14,000 shares in
Pinger Ltd on 1 April 1997 for £54,600.
You may assume that Alvaro is a higher rate taxpayer for the tax years 2005/06 and 2006/07. In 2006/07 he made
the following disposals of assets:
(i) On 1 July 2006 he sold the 6,000 shares in Pinger Ltd for £228,000.
(ii) On 1 September 2006 he sold 2,350 shares in Lapis Inc, a company resident in Koruba, for £8,270. Alvaro
had purchased 5,500 shares in the company on 1 September 2002 for £25,950.
(iii) On 1 December 2006 he transferred shares with a market value of £74,000 in Quad plc, a UK quoted company,
to a UK resident discretionary trust for the benefit of Vito and Sophie. Alvaro had purchased these shares on
1 January 2006 for £59,500.
Alvaro has not made any other transfers of value for the purposes of UK inheritance tax. He owns the family house
in the UK as well as shares in UK and Koruban companies and commercial rental property in the country of Koruba.
Maria has not made any transfers of value for the purposes of UK inheritance tax. Her only significant asset is the
family home in the country of Koruba.
Alvaro and his family expect to return to their home in the country of Koruba in October 2007 once Ray’s affairs have
been settled. There is no double taxation agreement between the UK and Koruba.
Required:
(a) Calculate the inheritance tax (IHT) payable as a result of the death of Ray Pelorus. Explain the availability
or otherwise of agricultural property relief and business property relief on the two lifetime gifts made by Ray.
(8 marks)
第2题
taxpayers. Barry, their son, is aged 32. Graeme, Catherine and Barry are all UK resident, ordinarily resident and
domiciled. Graeme has come to you for some tax advice.
Graeme has invested in shares for some time, in particular shares in Thistle Dubh Limited. He informs you of the
following transactions in Thistle Dubh Limited shares:
(i) In December 1986, on the death of his grandmother, he inherited 10,000 £1 ordinary shares in Thistle Dubh
Limited, an unquoted UK trading company providing food supplies for sporting events. The probate value of the
shares was 360p per share.
(ii) In March 1992, he took up a rights issue, buying one share for every two held. The price paid for the rights
shares was £10 per share.
(iii) In October 1999, the company underwent a reorganisation, and the ordinary shares were split into two new
classes of ordinary share – ‘T’ shares and ‘D’ shares, each with differing rights. Graeme received two ‘T’ and three
‘D’ shares for each original Thistle Dubh Limited share held. The market values for the ‘T’ shares and the ‘D’
shares on the date of reorganisation were 135p and 405p per share respectively.
(iv) On 1 May 2005, Graeme sold 12,000 ‘T’ shares. The market values for the ‘T’ shares and the ‘D’ shares on that
day were 300p and 600p per share respectively.
(v) In October 2005, Graeme sold all of his ‘D’ shares for £85,000.
(vi) The current market value of ‘T’ shares is 384p per share. The shares remain unquoted.
Graeme and Catherine have owned a holiday cottage in a remote part of the UK for many years. In recent years, they
have used the property infrequently, as they have taken their holidays abroad and the cottage has been let out as
furnished holiday accommodation.
Graeme and Catherine are now considering selling the UK country cottage and purchasing a holiday villa abroad.
Initially they plan to let this villa out on a furnished basis, but following their anticipated retirement, would expect to
occupy the property for a significant part of the year themselves, possibly moving to live in the villa permanently.
Required:
(a) Calculate the total chargeable gains arising on Graeme’s disposals of ‘T’ and ‘D’ ordinary shares in May and
October 2005 respectively. (7 marks)
第3题
A.transaction value
B.VAT
C.ad valorem duty
D.dutiable value
第4题
(ii) State, with reasons, whether Messier Ltd can provide Galileo with accommodation in the UK without
giving rise to a UK income tax liability. (2 marks)
第5题
A.revaluation
B.proportion
C.reduction
D.exemption
第6题
(ii) Explain how the inclusion of rental income in Coral’s UK income tax computation could affect the
income tax due on her dividend income. (2 marks)
You are not required to prepare calculations for part (b) of this question.
Note: you should assume that the tax rates and allowances for the tax year 2006/07 and for the financial year to
31 March 2007 will continue to apply for the foreseeable future.
第8题
Assume that the corporation tax rates for the financial year 2004 apply throughout.
(b) Explain the corporation tax (CT) and value added tax (VAT) issues that Irroy should be aware of, if she
proceeds with her proposal for the Irish subsidiary, Green Limited. Your answer should clearly identify those
factors which will determine whether or not Green Limited is considered UK resident or Irish resident and
the tax implications of each alternative situation.
You need not repeat points that are common to each situation. (16 marks)
第9题
(ii) why the ‘fair value option’ was initially introduced and why it has caused such concern. (5 marks)
第10题
4 Assume today’s date is 5 February 2006.
Joanne is 37, she was born and until 2005 had lived all her life in Germany. She recently married Fraser, aged 38,
who is a UK resident, but who worked briefly in Germany. They have no children.
The couple moved to the UK to live permanently on 9 October 2005. Joanne was employed by an American company
in Germany, and she continued to work for them in the UK until the end of November 2005. Her earnings from the
American company were £5,000 per month. Joanne has not remitted any of the income she earned in Germany prior
to her arrival in the UK.
Joanne resigned from her job at the end of November 2005. The company did not hold her to the three months notice
stipulated in her contract, but still paid her for that period. In total, Joanne paid £4,200 in UK income tax under PAYE
for the tax tear 2005/06.
Joanne also wishes to sell the shares she holds in a German listed company. The shareholding cost the equivalent of
£3,500 in September 1986, and its current value is £21,500. She intends to sell the shares in March 2006 and to
invest the proceeds from the sale in the UK. Joanne has made no other capital disposals in the year.
Prior to her leaving employment, Joanne investigated the possibility of starting her own business providing a German
translation service for UK companies, and took some advice on the matter. She paid consultancy fees of £5,000
(excluding value added tax (VAT)) and bought a computer for £2,000 (excluding VAT), both on 23 October 2005.
Joanne started trading on 1 December 2005. She made sales of £2,000 in December, and estimates that her sales
will rise by £1,000 every month to a maximum of £7,000 per month. Joanne believes that her monthly expenses of
£400 (excluding VAT) will remain constant. Her year end will be 31 March, and the first accounts will be drawn up
to 31 March 2006.
Although Joanne has registered her business for tax purposes with the Revenue, she has not registered for VAT and
is unsure what is required of her in this respect.
Required:
(a) State, giving reasons, whether Joanne will be treated as resident or non-resident in the UK for the year of
assessment 2005/06, together with the basis on which her income and gains of that year will be subject to
UK taxation. (3 marks)
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